Dollar Holds Near Two-Month High, Yields Rise

The dollar held near a two-month high as rising U.S. Treasury yields and inflation concerns supported it, despite softer-than-expected U.S. inflation data reducing expectations for an imminent Federal Reserve rate hike. Longer-term Treasury yields continued climbing amid worries about government finances, heavy bond issuance and persistent price pressures, while the euro and pound weakened against the dollar. A separate market update also linked modest dollar gains to higher Treasury yields and an improved U.S. growth outlook, though expected Fed rate cuts and stronger euro-area inflation limited the move.